China's Largest Manager Of Bad Debt On The Economy: "Grim And Complicated"

"The business environment this year has been "grim and complicated"; that is the message from China's largest manager of bad debt. As Bloomberg reports, China’s bad-loan ratio rose "significantly" in the first quarter, increasing risks for the nation’s banking industry, driving up banks’ sour loans for a ninth straight quarter as of December to the highest level since 2008. Huarong expects pressures on asset-quality, liquidity, and lending margins to continue.

As Bloomberg reports, new nonperforming loans amounted to more than 60 billion yuan ($9.6 billion) in the first two months of this year, compared with 100 billion yuan for all of 2013, China Business News reported on April 9, citing people it didn’t identify.

“The economic indicators we’ve seen so far are quite disappointing and repayment risks are rising across sectors from property to small businesses due to weak demand,” Rainy Yuan, a Shanghai-based analyst at Masterlink Securities Corp., said by phone.

“Banks will be hit in such an operating environment but managers of bad assets like Huarong and China Cinda Asset Management Co. stand to benefit” because they can accumulate more sour loans, she said.

China Huarong Asset Management Co. (the nation’s largest manager of soured debt) Chairman Lai Xiaomin said during an internal meeting on April 15, according to a statement today on the website of the Beijing-based company...

The business environment this year has been “grim and complicated” as lenders face pressures on asset quality, liquidity and lending margins...

China’s bad-loan ratio rose “significantly” in the first quarter, increasing risks for the nation’s banking industry...

Update details:
- Last month a senior official from the China Iron and Steel Association said that the domestic steel sector may have FACED ITS WORST Q1 SINCE THE YEAR 2000, as the quarterly CISA index measuring steel prices fell to its lowest in 20 years.

Corruption has been a huge issue within China for years now more problems are brewing. China has entered a great credit trap and is awash in overcapacity and debt. Much of the recent growth in China after 2008 came from a massive 6.6 trillion dollar stimulus program that expanded credit and poured massive amounts of money into the system. This money encouraged expansion and construction with little regard as to real demand or need.

After several years of growing debt concern is rising the whole unstable pyramid is about to come crashing down bringing China and possibly the global economy with it. This is not just about writing off a few bad loans. The shadow banking sector is so large that concerns exist about contagion and a domino series of defaults that might rack the economy as savers lose money. More on this subject in the article below.

I don't think China really cares. They know the current global monetary system will collapse with 100% certainty. They learned a little from the U.S. They blew a huge credit bubble to help garner as many real assets as possible: commodity stockpiles, cities to nowhere, their military, productive factories, etc. There *will* be contagion someday and the whole global monetary reset will be upon us. We are getting very close to midnight and everything seems to be accelerating almost on a daily basis.

undeniable that there's a shake down happenin in China but it's not real until all their cheep crap stops washing up on our shores, filling peoples homes and the manufacturing jobs return to north america. until then this is just talk

"Thebusiness environment this year has been “grim and complicated”as lenders facepressures on asset quality, liquidity and lending margins."This sounds much like beyond China too. There are not enough quality assets globally as collateral to keep this credit feast going on forever. The proof in front of your eyes comes as increased banker mortality rate.

"Rainy Yuan" ? is this an alias? 9.6billion is a small amount really. but if you believe where you see one cockroach there are many you dont, and factoring in the usual asian 'save face at any cost' cultural environment, multiply by 20 and you might have a better number....while it grows weekly.